Original scientific paper

Securing Trust on the Market

Gordan Vurušić ; Department of Political Science, University of Indiana, Bloomington, USA

Abstract

The purpose of this paper is twofold: first, on the normative level, the author compares three main ways of securing trust on imperfectly competitive markets – informal social enforcement, formal-third party enforcement, and conditional internal commitment to the cultural norm of trust, in terms of the standard criteria of allocative and adaptive efficiency. Admittedly, the three ways of securing trust in reality rarely exist separately and as ideal types, but the author separates them for the purpose of a normative analysis. The task of that analysis is to show that the system of conditional (upon the receipt of reciprocity) internal commitment to the cultural norm of trust is, on the normative level, the superior way of ensuring trust in terms of allocative efficiency in comparison with the other two ways (social enforcement, third-party enforcement). In terms of adaptive efficiency, the situation is more complicated as cultural belief systems change relatively slowly. The second purpose of the paper is to give a point of departure for the conceptualization of the emergence and stabilization of the system of internal commitment to trust. In that context the author uses the recent empirical and theoretic findings of indirect evolutionary approach to rationality.

Keywords

market; rationality; trust; distributive efficiency; adaptive efficiency

Hrčak ID:

22890

URI

https://hrcak.srce.hr/22890

Publication date:

26.7.2004.

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